Wildfire Risk Report: A Holistic Strategy for Wildfire Resilience

Executive summary

Wildfire activity and insured loss do not always move in the same direction. In 2025, across the 14 states Verisk includes in its wildfire risk analytics tools, wildfire counts rose less than 3%, acres burned fell nearly 60%¹, and fire and smoke claims rose 60% year over year.² Yet, nationally, wildfire claims from declared catastrophes increased nearly 500% from 2024 to 2025, with total loss increasing nearly 2,000%.³

The financial impact can be significant and visible in industry results. As Verisk and the American Property Casualty Insurance Association recently reported, the U.S. property/casualty industry saw a strong first half of 2026: an estimated net underwriting gain of $31.7 billion, up from the $11.6 billion underwriting gain recorded in the first half of 2025, when catastrophe losses from the Los Angeles wildfires significantly impacted industry results.⁴ Wildfire moves results at the industry level.

Key signals from 2025

Across the 14 states Verisk includes in its wildfire risk analytics tools, wildfire counts rose less than 3%, acres burned fell nearly 60%⁵, and fire and smoke claims rose 60% year over year.⁶
Nationally, wildfire claims from declared catastrophes increased nearly 500% from 2024 to 2025, with total loss increasing nearly 2,000%.⁷

Fire counts and acreage are hazard measures and do not provide a full understanding of wildfire loss potential. Loss is a function of hazard, exposure, vulnerability, and rebuilding economics all interacting at a location. Reconstruction cost offers the clearest example of how rebuilding economics drives loss outcomes: average construction time for a contractor-built single-family home has risen roughly 63% since 2000⁸, while labor costs are climbing more than twice as fast as the cost of materials⁹—pressure that lands on replacement cost adequacy long before it lands on a claim.

Carriers continue to manage capacity in high-hazard areas, refine their risk appetites, and scrutinize exposure concentrations. California FAIR Plan exposure has grown 250% since 2022 to $768 billion¹⁰, and Colorado has formed a new FAIR Plan, even as the broader property market softens. Regulators are working to protect solvency, maintain availability, and safeguard consumers at the same time. Each of those pressures asks the industry for something it can only produce by connecting its knowledge.

FAQs

What factors are driving wildfire insurance losses?

Wildfire insurance losses are shaped by more than the number of fires or acres burned. The financial outcome depends on the interaction of wildfire hazard, property exposure, structural vulnerability, mitigation, and reconstruction costs. Where a fire occurs, the concentration and value of properties in its path, and the cost of rebuilding can all significantly influence insured losses.

How is wildfire risk changing for insurers?

Wildfire risk is being shaped by changing hazard conditions as well as growth in property exposure. Research from the U.S. Forest Service shows that between 1990 and 2020, the U.S. wildland-urban interface expanded 31%, while the number of homes within it increased 46%, from about 30 million to more than 44 million. At the same time, insurers are managing capacity, underwriting appetite, exposure concentrations, mitigation, and reconstruction economics across increasingly complex markets.

How can insurers assess wildfire risk at the property level?

Property-level wildfire risk assessment requires looking beyond a single hazard score. Insurers can evaluate factors including surrounding fuels, wind-driven ember exposure, construction characteristics, mitigation measures, and rebuilding costs, alongside catastrophe exposure. Connecting these signals can support more informed underwriting, risk selection, pricing, and portfolio management.

How does wildfire mitigation affect insurance risk?

Wildfire mitigation can reduce structural vulnerability and help insurers distinguish between properties that may share similar geography but have different levels of risk. Effective assessment considers measures such as structure hardening, defensible space, community preparedness, and wildfire-focused building codes and standards. Quantifying those measures can help incorporate mitigation more consistently into risk assessment and underwriting decisions.

How does wildfire risk vary by state?

Wildfire risk can vary significantly by geography, structure exposure, risk category, claims activity, reconstruction costs, building-code environment, and local mitigation efforts. The report examines 14 states to show how fire activity intersects with property exposure and claims trends, providing a more detailed view of where insurance pressures may be emerging.

How can insurers improve wildfire claims response and recovery?

Insurers can connect event intelligence, property data, estimating tools, claims data, and workflow visibility to better understand an active wildfire's footprint, identify potentially affected properties, prioritize response, and support recovery. Aerial and satellite imagery, weather intelligence, and geospatial analysis can also help assess damage and direct claims resources.

¹ Data from FireLine

² Analysis of ClaimSearch data for all fire and smoke claims (not only those attributed to wildfire)

³ Analysis of Verisk PCS^® data

⁴ "Verisk and APCIA Report Net Underwriting Gain of $31.7 Billion for U.S. Property/Casualty Insurance Industry in First Half of 2026," September 2, 2026, accessed September 17, 2026, https://www.verisk.com/company/newsroom/u.s.-pc-insurers-post-strong-underwriting-gains-through-first-half-of-2026-line-specific-and-geographic-challenges-persist/.

⁵ Data from FireLine

⁶ Analysis of ClaimSearch data for all fire and smoke claims (not only those attributed to wildfire)

⁷ Analysis of Verisk PCS^® data

⁸ Length of Time, U.S. Census Bureau, April 29, 2026, accessed August 31, 2026, https://www.census.gov/construction/nrc/data/time.html.

⁹ Verisk, 360Value Quarterly Reconstruction Cost Analysis, Q3 2026, accessed September 17, 2026, https://www.verisk.com/resources/campaigns/360value-quarterly-cost-updates/.

¹⁰ California FAIR Plan, Key Statistics & Data, accessed August 31, 2026, https://www.cfpnet.com/key-statistics-data/.

A Holistic Strategy for Wildfire Risk in Transition

Executive summary

Key signals from 2025

FAQs